Reports of an American strike on Iran's Qeshm Island put crude back on the front foot on Tuesday and pushed European equity futures lower, one day after talks between Iranian and Qatari officials had sent oil down 7.6%. The Wall Street Journal reported the strike first, citing US officials, and a US official confirmed it to Reuters. Qeshm Island sits in the Strait of Hormuz, the waterway that once moved roughly a fifth of world crude and gas supply.
The timing is what moved prices. Tehran had signalled openness to peace talks on Monday, and US President Donald Trump had indicated he might hold off on strikes against Tehran until after Tuesday's US midterm voting. With both paths still live, oil repriced for the military one.
Monday's session had gone the other way in full. Brent crude settled at $104.77 a barrel after falling $8.66, or 7.63%, while US West Texas Intermediate settled at $96.46, down 7.4% in its biggest one-day drop since July 27. The trigger was a round of talks between Iranian and Qatari officials, plus a statement from Iranian President Masoud Pezeshkian that Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain powers to pursue negotiations.
The mood has flipped twice in two sessions. Monday priced peace; Tuesday priced escalation.
The oil round-trip in numbers
| Benchmark | Monday settle | Tuesday early trade | Move from settle |
|---|---|---|---|
| Brent crude | $104.77 | $105.00–$105.25 | +0.1% to +0.5% |
| WTI crude | $96.46 | $96.93–$97.00 | +0.3% to +0.5% |
Brent's early gain of $0.23 to $0.48 a barrel reclaims roughly 3% to 6% of Monday's $8.66 drop. Goldman Sachs, in revised forecasts carried by Reuters, lifted its December Brent forecast to $105 a barrel from $90 and its WTI forecast to $94 from $81. That December Brent figure sits just $0.23, or 0.2%, above Monday's settle. Its upside case is a different market: Brent at $140 in 2027 if Gulf output stays 3.5 million barrels a day below its 2025 average. From Monday's settle, $140 would be a $35.23 rise, or 33.6%.
Why it matters
Europe opens into this with futures already marked down. By 0712 GMT, futures on the pan-European STOXX 600 were more than 1% lower, and DAX and IBEX futures were off roughly 1%. That follows a Monday close in which the same indexes rose on peace-talk hopes: the Stoxx 600 added 0.42% to 649.44 and the DAX gained 0.63% to 25,981.09.
The drag is not oil alone. Asian equities fell first: MSCI's Asia-Pacific index outside Japan dropped 1.4% to its lowest since October 23, South Korean shares fell as much as 4.1% and Taiwan's benchmark slid 3.3%, extending its loss from an early-October record to 13.1%.
On Wall Street on Monday the S&P 500 slipped 0.50% and the Nasdaq fell 1.10% while the Dow added 214 points. Australia's central bank lifted its cash rate 25 basis points to 4.85% in a 6-3 vote, a two-decade high.
Company news cuts both ways for the open. Lufthansa said it was trimming its profit outlook.
AI hardware names Aixtron, ASML and Schneider Electric face pressure after the Asian selloff, and Apple's weaker gross margin forecast for the holiday quarter, tied to rising memory-chip costs, is weighing on sentiment. Bayer runs against that tide after raising its 2026 profit outlook.
What to watch
- Statements from Washington and Tehran: talks or further strikes around Hormuz.
- Results from Tuesday's US midterm voting, which Trump had linked to strike timing.
- The Bank of England's rate decision on November 6.
- Shipping reports from the Strait of Hormuz, where fresh disruption would test Goldman's $105 base case against its $140 upside case.
Key points
- Washington carried out a strike on Qeshm Island in the Strait of Hormuz, according to a US official cited by Reuters.
- Brent settled Monday at $104.77, down $8.66 or 7.63%, and traded at $105.00–$105.25 early Tuesday; WTI settled at $96.46.
- Futures on the STOXX 600 were more than 1% lower, with DAX and IBEX futures off roughly 1%.
- Iran had signalled openness to peace talks on Monday and Trump had indicated strikes on Tehran might wait until after the midterms.
- Goldman Sachs raised its December Brent forecast to $105 from $90, with a $140 upside case for 2027 if Gulf output stays 3.5 million barrels a day below 2025 levels.
MarketRadar take
One strike report has not undone Monday's repricing. Brent has recovered only a small fraction of its $8.66 fall, and European futures are pricing a lower open rather than a panic close, which reads as a risk premium returning, not the talks story ending. The balance now turns on the next official statement from either capital.
